Developing and Instilling a Revenue Management Culture
By Nicholas Tsabourakis Founder & Managing Director, Bespoke Revenue Management | March 25, 2018
The success of a TRM process depends on not only the main objectives that a hotel or hotel company aims to achieve, but also the route it plans to take and move on to lead towards accomplishing those. The ideal route to maximize profit by adapting a TRM approach is through developing and instilling a revenue culture. A coherent revenue strategy is more than just systems, demand forecasting and constant price adjustments. It is a business philosophy and strategy that when taken into account in all departmental procedures can result in increased revenue & profit performance.
A revenue culture implies that all participants have a common vision of what needs to be achieved, why, and how. By having a clear understanding of what the organization stands for, and the strategies and tactics it employs to reach set targets, one will find it easier to define standards of performance, and establish expectations. Whilst not everyone will ultimately be responsible for achieving what is required, it is essential that relevant stakeholders participate in the discussions and everyone is aware of the decisions taken. This will improve cross-departmental communication & engagement which are the key elements of a revenue culture and will ultimately foster collaboration and innovation.
Furthermore, having an overall view of the business will motivate and incite involvement, a factor that will give the team a sense of ownership. The implementation of a rigorous training program is mandatory to shape and instill the right mentality and guarantee long-term success. This will create an environment that celebrates opportunities, transparency, and diversity.
It is important to understand that no matter how well planned and executed a strategy is, it will not reach its full performance potential unless it is aligned with the overall culture. The best strategies will not work in isolation especially if they cause conflict to targets or plans of other departments. This is something we have seen very often in a number of hotels we have worked with where inconsistent strategies can lead to profit loss & operational inefficiencies.
The Importance of a Revenue Culture
1. Allows the production of profit maximisation strategies
Revenue management is a culture that needs to focus entirely on profit maximization of your hotel, which is the top priority in your set of targets. Developing & establishing such a culture will aid the development of your hotel's profit maximization strategies. This will lead to strategies that focus entirely on profit performance of the operation as a whole by allowing a deeper dive in the revenue potential of each department.
2. Allows to focus on performance strategies and long-term growth